KRA loses Sh5.6 Billion Lawsuit Against Coca-Cola Bottlers

The Kenya Revenue Authority (KRA) has lost a landmark case involving a Sh5.6 billion tax dispute with local Coca-Cola bottlers after the Supreme Court turned down a request to reopen the 10-year-old case.

KRA sought the Supreme Court to reconsider the case’s dismissal. Judges, however, turned down the motion and upheld an earlier ruling from September 22, 2021, claiming that reviving the 2012 issue is not only unjust but also callous and cruel.

“We observe that the issue began in the High Court ten years ago in October 2012, and then moved to the Court of Appeal in July 2013,” stated a five-judge panel led by Chief Justice Martha Koome.

“It is not only unconscionable but also insensitive and cruel to reopen the matter for no fault of the respondents.”
The disagreement centered on whether the soft drink firm should pay taxes on expenditures associated with cleaning and sanitizing returned bottles.

For the years 2006 to 2009, KRA demanded tax arrears, fines, and interest on excise duty on returnable containers.
Mount Kenya Bottlers, Rift Valley Bottlers, Nairobi Bottlers, and Kisii Bottlers had been sued by Coca-local Cola’s franchises.

After three justices of the Court of Appeal rejected a High Court ruling dated October 26, 2012, allowing KRA to impose a tax on returnable containers, the taxman proceeded to the Supreme Court.
The Supreme Court judges unanimously concluded that KRA was not only “injudicious (in the dispute), but also arrogant” in defying the court’s Deputy Registrar’s orders.

The court also found that KRA had failed to treat the situation with the seriousness it warranted. Justices Mohammed Ibrahim, Njoki Ndung’u, and William Ouko are among the other judges on the bench, as are Deputy Chief Justice Philomena Mwilu and Justices Mohammed Ibrahim, Njoki Ndung’u, and William Ouko.